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I have no proper knowledge of business but here's my cent's worth anyway.
A fair profit is one which is not earned by underpaying workers, overcharging consumers, avoiding taxes, or destroying segments of nature or the ecosystem of the planet.
There are quite a few businesses which operate very successfully this way, but they are small in size and number compared to the weight of the corporations.
Business needs to make enough to cover its running costs and taxes, plus a bit extra to cover the unforeseeable. Other than that, large profit is not essential. I assume a system which refuses debt. Hire purchase would be ok because it doesn't compound, is a predictable expense and thus can be budgeted.
If I had to give a percentage I'd say 6% per annum is fair at today's levels - but a drift towards 2% profit would be better for long term fairness, and for the planet's future, 0.2%.
The typical business model is built on the idea that continual growth is necessary. It's built into the idea of borrowing at rates beyond the capacity to repay, based on trust. Investors expect a return for their capital: if sensible, they expect a low, steady, reliable return, rather that a shooting star with a high failure rate.
But the earth's resources are limited. And as long as populations keep growing, they speed the approach of the day when many resources run out.
At that point, if global warming hasn't already destroyed this round of evolution, businesses will no longer have the resources with which to earn anything.
At some point some of them are going to start seeing this inevitability approaching - and the ones most likely to survive will be the ones learning new economic models not based on endless growth but on circulating and recycling.
The planet has three wicked problems - global warming, endless-growth big business, and population increase - all of which exacerbate each other. Of course terrorism and war are serious problems - but while we're busy being distracted by human strife, the planet and nature are on a juggernaut with a momentum we have run out of time to change.
But, Rosie, since you were an internal auditor, wouldn't you be the one best able to answer your question of fair profit?
What would your answer be?
